Why Companies Should Support the DOMA Ruling

Last week’s U.S. Supreme Court rulings regarding LGBT equality resounded throughout the business community, with major brands reacting across the Twitterverse and digital media landscape. Companies favoring the ruling cited many drivers for their support including core values (Mondelez International), diversity and inclusion (Nike), civil rights (Apple), and even a stronger American economy (Goldman Sachs).

Last year, we wrote for HBR that business is increasingly supporting gay rights, and with the DOMA and Prop 8 rulings that sentiment will only grow. In a marketplace where hundreds of leading companies have continued to advocate on behalf of more inclusive public policy, the dialogue continues regarding the business case for and implications regarding the state and federal treatment of the LGBT community. And in our opinion, it’s just common sense for companies to come out in support of their equality, for a couple important reasons:

The Supreme Court ruling gives scores of Americans access to previously-denied benefits—making HR’s job easier and cheaper. The 5-4 ruling paves the way for same-sex married couples legally married by the states to receive the hundreds of federal benefits (including taxes, insurance, social security, immigration) available to other married couples, which has positive implications for the concerns and costs articulated by the business community.

For example, a resulting benefit from the DOMA ruling concerns the employers who equalize health benefits for gay workers. Prior to the Supreme Court ruling, companies wanting to ensure equal benefits for LGBT employees paid a tax that LGBT employees have owed on the value of health insurance coverage for a same-sex partner (due to DOMA, the federal government didn’t recognize same-sex partners as an economic unit). For leading companies (40 for-profit employers, according to the Human Rights Campaign Foundation), the DOMA ruling will literally add money back to their bottom lines.

In addition to financial benefits, hailing the Supreme Court decisions gives companies an edge among the influential millennial audience. At 80 million strong, millennials make up the largest generation in US history. And according to a recent PEW research report, 70% of this audience supports same-sex marriage—a remarkable 22% increase since 2008.

Companies battle every day to break through the noise and reach the elusive millennial generation, both from a marketing and recruitment standpoint. Using the Supreme Court rulings as an opportunity to publicly express support for marriage was a smart move for companies hoping to attract the millennial audience. From a marketing standpoint, millennials, more than any other age group, factor in cause and purpose to their purchasing decisions and expect companies to care about social issues. Equality and inclusion [PDF] in particular are central to their worldview.

Supporting marriage equality is smart from a recruitment standpoint as well, as millennials will be 75% of the workforce by 2025. Companies that promote acceptance and diversity will likely appeal to millennials’ preference for open, dynamic cultures that exude a sense of purpose.

But the issue is far from resolved. Despite the business benefits of the rulings, there is still some confusion regarding precisely how some of the complexities will be resolved. Same-sex couples who get legally married in one state, but then move to a state where same-sex marriage is not legal, will be left in an ambiguous place from a business standpoint.

Looking forward, there are still a number of issues yet to be resolved and companies will play a central role in establishing the status quo and identifying solutions. But one thing is clear. As the millennial generation, pop culture, and business continue to overwhelmingly support marriage equality policy, the question is not if, but rather how and when, these obstacles will be overcome.

Susan McPherson is a Senior Vice President at Fenton and regularly speaks and writes on corporate responsibility, social entrepreneurship, international development and social change. Laura Clise is the director of External Communications & Corporate Citizenship for AREVA Inc.